Real estate agents today are competing in a landscape that continues to evolve, from clients’ fascination with HGTV to technology change happens at a rapid clip.
Residential real estate also has attracted financial services companies to the industry like moths to a flame. However, Pamela J. O’Connor, president and CEO of Chicago-based
Leading Real Estate Companies of the World, pointed out in a recent column in Forbes that corporations ranging from Metropolitan Life and Prudential to GMAC and Meredith Corporation have found that real estate is much more challenging than it may appear from the outside.
“Because I’ve seen so many new models emerge that were expected to put real estate agents out of business — Zillow’s Instant Offers, Redfin Now, OpenDoor — I know that platforms designed to let homeowners sell their homes instantly are not a threat to the entire industry because all consumers are not alike,” O’Connor said.
In fact, Zillow Group CEO Spencer Rascoff has accused Redfin of being “a threat to organized real estate,” adding that it seeks to run many agents out of business.
O’Connor isn’t so sure.
“These models may appeal to sellers who value certainty and potential efficiency over financial return, but those sellers represent only a part of the market,” she wrote in Forbes. “Most sellers need and want the full return on their investment and will not be willing to sacrifice dollars.”
According to O’Connor, the new technologies and offerings from Zillow, Redfin and others simply add another dimension to the way all homes are bought and sold but will not create wholesale change.
“My experience is that so-called disruptors almost always make the industry better by forcing us to become more creative and adaptable,” she said. “I prefer the phrase “alternative models” rather than “disruptors” because that’s really what they are — different choices for consumers and agents and brokers.”
The real wild card for the real estate industry are not agents and brokers, but rather the transaction itself, from the number of parties involved, regulations that extend the window to close and add paperwork and laws that vary from state to state, impacting buyers who are relocating.
Everyone would win if industry participants were to work together to provide a smoother, more transparent process for clients.
O’Connor noted that her real estate network, LeadingRE, recently completed a study that identifies distinct segments of consumers who have differing needs, wants, lifestyles or decision processes.
“This type of data is critical in matching services to the needs of different consumers, and I trust that real estate brokers and agents will do just that, with new products and service offerings that provide a broad range of choices,” she said.
In the sea, the fish that are most creative thrive. Think of the real estate industry in a similar light. The biggest winners are the most creative and progressive professionals. O’Connor notes that they are the ones who know the market, the product and the consumers.
“Granted, real estate is our business to lose, but I wouldn’t count out today’s practitioners,” O’Connor concluded. “The strong will adapt, develop new solutions and ultimately not only survive, but even more importantly, thrive.”